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The dust settles on Greece, but where does it go from here?

The New Democracy party has won the Greek legislative elections with 29.7 per cent on the vote, narrowly beating the radical left-wing party SYRIZA, which earned 26.9 per cent, in what is widely seen as a referendum on the Greek people's acceptance of the EU-imposed austerity package.

Under Greek electoral law, ND is awarded an extra 50 parliamentary seats for coming in first place, which means it has 129 seats overall. A viable coalition requires at least 150, however, so it will still have to find a coalition partner. It is most likely to join forces with the centre-left party, PASOK, previously its major opponent in fights for the centre-ground of Greek politics but now an uneasy bedfellow as implementing the European memorandum (which ties the Greek government to large spending cuts) takes priority.

A PASOK-ND coalition would have 162 seats, and appears likely to be topped up with another 17 from the Democratic Left party (DIMAR), formed of ex-PASOK and SYRIZA MPs. There are several hurdles to be overcome before this coalition can be put in place, not least of which is the self-serving nature of PASOK itself.

Reports from Greece indicate that PASOK's leaders are only too aware that being in charge of a second round of crippling spending cuts could destroy their electoral base, particularly when they have such a viable contender for the left's votes in the form of SYRIZA. As a result, senior figures at PASOK are suggesting that they won't join a coalition unless SYRIZA joins as well - something which the radical left is unlikely to countenance.

While it seems likely that PASOK are only making such a demand out of a desire not to seem too eager to run into the arms of their former enemies, it highlights the difficulty this coalition will have in doing anything not related to the near-state of emergency that Greece is currently experiencing. Many of the more pessamistic analysts and commentators are predicting a breakdown in relations before the end of the year, leading to a third set of elections – one which SYRIZA would almost certainly win.

Even if the full ND-PASOK-DIMAR coalition comes about, all Greece has achieved today is a return to the status quo of earlier this year. Greece remains in the euro for the foreseeable future, but the root of its problems with the EU are no closer to being addressed. The austerity which the coalition will impose will keep Germany and the ECB happy, which will keep money flowing into the country for the time being (an undoubtedly good thing, since reports had suggested that Greece was likely to run out of money to pay its public sector around mid-July without more European funds), but eventually that spigot will have to be turned off.

In addition, the bank jog which could see Greece being mechanically ejected from the single currency won't stop just because SYRIZA came in second place. Deposits have been steadily flowing out of Greek banks since 2009, and if too many euro end up in German banks, the Greek banking sector could fail in one go.

Even the surface level negotiations – the ones which don't solve the underlying contradictions, but merely provide the funding and credibility for Greece to carry on as it has – could go in any number of directions. The troika (the European Central Bank, the European Commission, and the IMF) is likely to head to the country as soon as there is someone to negotiate with, and there have been reports that they are likely to give the Greek people a "reward" for being co-operative. German foreign minister Guido Westerwelle suggested that the coutnry may be given more time to repay its debts, and the Financial Times last week claimed that the EU was preparing to offer Greece discounted loans if New Democracy won the elections.

When the dust settles, the European Union will find that it has to decide whether it heads down the road of ever deeper fiscal integration, turning Greece into

Hannan Fodder: This week, Daniel Hannan gets his excuses in early

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.